FI Morning Grain Comments 05/02/22

PDF attached

 

Good
morning.

 

This
morning lack of news and a higher USD coupled with improving US weather are pressuring CBOT agriculture futures. Many countries are on holiday today so a thin market could result in a choppy trade. WTI crude oil was down $3.15 at the time this was written,
and USA was up 60 points. The past seven days was very wet for US producers. We are already hearing of some potential switching from corn to soybeans if farmers are not able to get corn in by mid-May. Malaysia and China are on holiday. NASS crush is due out
this afternoon (estimates below).

 

 

 

 

Weather

Past
7-days

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 2, 2022

• West
  Texas rainfall was disappointing during the weekend, although not far off from the forecast 
  
• there
  are three more rain events possible over the next ten days most of which will be light, but Wednesday into Thursday of this week could be a little wetter
  
• this
  will lead to a little market volatility
• Southwestern
  U.S. hard red winter wheat areas are unlikely to get much precipitation during the next ten days despite frequent rain in the north and east
  
• drought
  will prevail in the southwest and will maintain some worry for the southwestern Plains production potential
• U.S.
  Midwest precipitation will be frequent and abundant while temperatures are cool this week resulting in planting delays
  
• next
  week will trend a little warmer, but the precipitation may continue limiting field progress
• Canada’s
  southwestern Prairies will not get enough rain to seriously improve soil moisture – at least not in this week, although a little moisture may occur toward the latter part of this week
• Mato
  Grosso and Mato Grosso do Sul as well as Goias will get “some” rain over the next week, but resulting amounts will be a little too sporadic and light in Safrinha corn and cotton areas to induce the best possible crop development
  
• Any
  showers will help curb the drying rates and buy a little more time before crop stress seriously impacts production
  
• Corn
  is more vulnerable to production cuts than cotton
• Argentina
  will be drying for the next ten days while southern Brazil continues wet biased

Source:
World Weather Inc.

 

 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Monday,
May 2:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Cotton
  market outlook by International Cotton Advisory Committee
• U.S.
  crop progress and planting data for corn, soybeans and cotton; winter wheat condition, 4pm
• USDA
  soybean crush, corn for ethanol, DDGS output, 3pm
• Honduras,
  Costa Rica monthly coffee exports
• Australia
  commodity index
• HOLIDAY:
  China, Malaysia, Indonesia, Hong Kong, Singapore, Thailand, Vietnam, Pakistan, Bangladesh, U.K.

Tuesday,
May 3:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• Purdue
  Agriculture Sentiment
• HOLIDAY:
  China, India, Malaysia, Indonesia, Singapore, Japan, Vietnam, Pakistan, Bangladesh

Wednesday,
May 4:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• New
  Zealand commodity prices
• HOLIDAY:
  China, Japan, Malaysia, Indonesia, Thailand, Bangladesh, Pakistan

Thursday,
May 5:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• HOLIDAY:
  Japan, Indonesia, South Korea, Pakistan

Friday,
May 6:

• FAO
  World Food Price Index
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Statistics
  Canada releases stockpiles data for barley, canola and wheat
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  Indonesia

Source:
Bloomberg and FI

 

 

 

 

 

CFTC
Commitment of Traders

No
major surprises for the week ending April 26. During that period, we did see selling by money managers and that is reflected in the major contracts with exception of soybean oil (futures and options). Futures and options corn open interest was down a large
205,700 contracts. 

 

 

Macros

 

Corn

·        
This morning lack of news and a higher USD coupled with improving US weather are pressuring CBOT agriculture futures.

·        
The USD was sharply higher and WTI lower by more than $3.00/barrel.

·        
Many countries are on holiday today so a thin market could result in a choppy trade.

·        
Traders should continue to monitor bird flu disease outbreaks as that could result in feed demand destruction.

·        
We are already hearing of some potential switching from corn to soybeans if farmers are not able to get corn in by mid-May.

·        
Turkey apparently cancelled their local and international tender for 480,000 tons of wheat due to high prices.

·        
Thailand is looking into suspending corn and wheat exports over an animal feed shortage, and ease corn import rules.

 

 

Export
developments.

·        
None reported

 

Soybeans

·        
Soybeans, meal and soybean oil are lower in the non-expiring contracts in a risk off session, higher USD and lack of fresh news. China continues to implement strict Covid-19 lockdowns, hampering trade.

·        
Malaysia and China are on holiday. There was no recent update on Indonesia’s palm oil ban.

·        
Offshore values are leading SBO 4 points lower and meal $7.30 short ton lower.

·        
Rotterdam meal was down 20-45 euros from this time Friday morning and vegetable oils 3-8 euros lower.

·        
AmSpec reported April Malaysian palm oil exports at 1.113 million tons, down from 1.292 million tons for March. ITS reported 1.136 million  tons, down from 1.353 million during March.

·        
NASS crush is due out this afternoon (estimates below).

 

Export
Developments

·        
China looks to sell another 500,000 tons of soybeans from reserves on May 6.

 

 

Wheat

·        
US wheat futures are lower from macro influences, lower USD and rain expected for parts of the Great Plains this week. There are three more rain events possible over the next ten days that could improve winter wheat conditions.
The next two weeks will be very important for wheat production ahead of the upcoming harvest.

·        
The euro was lower, but September Paris wheat futures are down 4.00 euros to 376 at the time this was written.

·        
Ukraine’s president Volodymyr Zelenskiy warned Ukraine could lose tens of millions of tons off grain (exports) due to the blockade. There are reports of Russian targets on Ukraine grain infrastructure.

·        
India’s weather is threatening wheat production. March was the hottest in 122 years. The government warned production could be down 6 percent from their initial estimate.

 

Export
Developments.

·        
Turkey apparently cancelled their local and international tender for 480,000 tons of wheat due to high prices.

·        
Jordan seeks 120,000 tons of feed barley on May 10 for Aug/Sep shipment.

·        
Jordan seeks 120,000 tons of wheat on May 11 for Jun/Aug shipment.

 

Rice/Other

·        
None reported